Project Management Institute

The office

LAUNCHING A PROJECT MANAGEMENT OFFICE IS ONLY THE BEGINNING. COMPANIES MUST REALIZE IT'S NOT ONE SIZE FITS ALL.

BY KELLEY HUNSBERGER

ILLUSTRATION BY JOYCE HESSELBERTH

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You've got the people. You've got the processes. But to make project management really work, it often comes down to how those two vital elements interact. And that's where many companies are finding a project management office (PMO) can help.

The number of organizations with an established PMO jumped from 47 percent in 2000 to 77 percent in 2007, according to The State of the PMO 2007-2008, a survey of senior project management practitioners by the Center for Business Practices, Glen Mills, Pennsylvania, USA.

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TIP
Consider the Project Manager

“Project management offices [PMOs] that focus too much on enforcing policy and procedure, as opposed to project success, tend to turn off project managers. From my experience, the type of PMO that project managers want to work with are grounded in proper investment governance, good executive decision-making and high-level portfolio management, rather than overly concentrated on methodologies and processes.”

–STEVE ROMERO, PMP, CA, ISLANDIA, NEW YORK, USA

“I think the main reason [to establish a PMO] is to identify a way to have consistent methodology to really improve the efficiencies within the organization,” says Kirsten Lora, worldwide product director for business training at Global Knowledge Training, Cary, North Carolina, USA. “If you make sure that things are repeatable then you're going to recognize some cost savings and benefits because everybody will be speaking the same language and actually following the same steps to manage a project.”

PMOs can also help curb investments in wayward efforts, says Steve Romero, PMP, IT governance evangelist at CA, an IT management and software company based in Islandia, New York, USA.

“Organizations have historically looked to project managers and methodology to solve project woes without realizing that many investments are doomed before they begin,” he says. “Project managers are saddled with irrational project portfolios and unreasonable project workloads. The key problem is the disparity between demand and resource availability and capability. This problem cannot be overcome by project managers and methodology, but by appropriate investment in governance and good executive decision-making.”

For all their benefits, PMOs can still be a tough sell. And securing buy-in usually comes down to one thing: the payoff.

“You need to convince the skeptical CEO that the PMO will be a sound return on investment … and demonstrate that the projected savings outweigh the cost of the PMO,” says John Middlemist, PMP, a program director at Procoplan Consulting pty Ltd., Sydney, Australia.

SPANNING THE SILOS

The city of Arlington, Texas, USA, had always managed its IT projects on a department-by-department basis. But the silo approach often left the different departments—water, utilities, etc.—looking out for themselves.

So last September, the IT department launched a PMO that spans all those silos. “IT—with a PMO department or group—can look at what's in the best interest of the city from a particular project's perspective and across those departmental boundaries a little more objectively,” says Gary Allison, assistant director of IT for the city of Arlington.

The goal was to focus on priorities and establish consistency in handling technology projects, budgeting and even the way different departments communicated.

“We want our customers throughout the city of Arlington to be able to work on any project with any one of the project managers and have a consistent way to interact,” says the city's CIO Louis Carr.

But it wasn't always a smooth process. “When I first started here I was told to anticipate resistance on the users' parts,” Mr. Allison says. “They would not want to have IT's involvement in their projects.”

8 The number of people working in the average PMO

SOURCE: THE STATE OF THE PMO 2007-2008

Mr. Carr and Mr. Allison had to prove the worth of the PMO—and even of project management—but the effort is paying dividends.

“As soon as we started introducing true project management skills and initiatives, the value was seen. And the demand has grown ever since,” Mr. Allison says.

But the future of the PMO is by no means guaranteed. “We need to get small wins to continue to increase credibility,” Mr. Carr says. “It continues to be an evolution of the IT department and the services that we deliver. That's ultimately what we're here for. The end-goal is IT being able to deliver solutions that are quality solutions—cost-effective in a timely manner—to help business get done. And the PMO is a very important thread in that line.”

HOW DO YOU GET THERE?

Taking the leap from the nebulous idea of a PMO to actual implementation can no doubt be intimidating. So what's an organization to do? Here are a few steps that may help facilitate the process:

Ready. Set. Go.

Late last year, the countdown began. John Middlemist, PMP, Procoplan Consulting pty Ltd., started work on establishing a project management office (PMO) for Stockland, a large property investment and development group based in Sydney, Australia.

“[It] was launched at the request of a newly appointed CIO who had inherited a number of projects that were blowing out their agreed baselines,” Mr. Middlemist says. “The CIO had previous experience working for a large multinational service provider who embraced the PMO function as a necessity in managing the delivery of work to clients.”

The goal is to provide Stockland with a project management capability through the use of consistent tools, methodologies and training. And that, Mr. Middlemist contends, is going to translate into quality projects delivered on time and within budget.

So far, most of the company's project management community has embraced the change. “I think that this is due to them being involved with the launch and being communicated to on a regular basis,” he says.

Right from the start, Mr. Middlemist and his team called for stakeholder participation, beginning with a fact-finding phase last November. As part of the process, project managers, project sponsors, team managers and team members were all interviewed. The Procoplan team also reviewed project templates to find out how business was done and how Stockland's project community wanted it to be done in the future. “The new PMO was designed to fulfill their requirements,” Mr. Middlemist says.

That's not to say there haven't been some challenges along the way. “[The organization] has a very low maturity level—no formal current processes or tools, etc.—and therefore the project managers are using whatever they can find from websites,” he says.

To keep the PMO launch on target, Procoplan worked closely with Stockland to establish several key milestones, including:
1 November 2007.......... Receive authorization to proceed
15 November 2007........ Complete fact-finding
30 November 2007........ Agree on the project management processes and templates, which are aligned to PMI's A Guide to the Project Management Body of Knowledge (PMBOK® Guide)
7 December 2007........ Present and communicate plan to the organization's project management community and complete the design of a PMO intranet site
25 January 2008.......... Complete development and testing of intranet site
1 February 2008 .......... Launch PMO tools and processes
7 April 2008.................. Complete formal training
30 May 2008................ Complete updates to templates

Closing Time by Jerry Taylor, PMP

Backed by strong leadership and vision, the corporate project management office—dubbed the cPMO—at Blue Cross Blue Shield of Michigan in Detroit, Michigan, USA, had a good run for its first five years. But after a changing of the guard at the upper levels of the cPMO, that leadership and vision faded. And last November, the PMO closed.

During the PMO's last year, role clarity diminished and confusion set in for the project teams, which included members from both IT and business units. The duties of the project manager became blurred with those of the development manager. And accountability—from either party—for the project's success or failure wasn't consistent across the organization.

A lack of customization also contributed to the ill perception of the cPMO within the organization. Tools and standards employed to support project management processes were often duplicated instead of tailored to meet the needs of individual projects, rendering them virtually ineffective. For example, two separate tools—one employed by the cPMO and one by the IT organization—were used to store the same project deliverables.

Other tools made tasks more difficult than necessary; standards were driven beyond the business value gained.

The cPMO faded from direct involvement in the day-today management of projects and tasked itself with simple status reporting. Because of this lack of direct involvement, people working inside the office were unable to provide executives with the high-quality, consistent information they needed to make informed decisions. As a result, a very large and strategically important project fell drastically behind schedule and went over budget. Morale in the cPMO office was low, and that feeling spread to other business units—further fueling the demise of the cPMO.

After the office finally closed its doors, project management responsibilities were disseminated into each of the business units. As this reorganization evolves, the following issues will have to be addressed:

  • Without independent executive leadership, there may be a need to design in the ability to provide responsible but independent project controls.
  • Those that take over the new roles created by the reorganization of the cPMO may lack the skills necessary to assume those responsibilities and may need additional training.
  • Moving to a decentralized project management organization will still need centralized control of both tools and standards.

In 2008 Blue Cross took action and has provided a well-designed and communicated strategy to improve methodologies through employee suggestions and providing decision-makers with accurate project information at a time when it can make a difference.

There are lessons to be learned from this situation, but first and foremost, PMO leadership must accurately define and communicate a vision for its members. That vision will drive role clarity, project team cohesion and the proper implementation of tools and standards. Without that, the PMO may not survive.

Jerry Taylor, PMP, is a senior business analyst at Blue Cross Blue Shield of Michigan, Detroit, Michigan, USA.

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70

The percentage of PMOs with training goals for its staff

SOURCE: THE STATE OF THE PMO 2007-2008

Establish some guidelines. No PMO will be successful unless you decide on the goals. “Identify what you want the PMO to do. Then document it in a charter and communicate it to its [stakeholders],” Mr. Middlemist says.

“There has to be a clear understanding of why the organization thinks it needs you and the team. But that's a journey, not a destination,” says Aaron Hall, PMP, director of portfolio and product management with mobile business at AOL, Dulles, Virginia, USA. He is also on the board of directors for the PMI Washington, D.C. Chapter.

Choose your model. The most common PMO categories are controlling and advisory, says Jim Johnson, chairman and founder, The Standish Group, a Boston, Massachusetts, USA, research company. In the controlling PMO category, project managers report directly to the PMO, while advisory PMOs serve more of an education and support role.

But Mr. Johnson is quick to warn that no two PMOs are the same—and that's a good thing. “A PMO is better suited to adapt to the corporate culture,” he says. “And all corporate cultures are different, so therefore all PMOs are different.”

In 2007, internet giant AOL had close to 2,700 projects in the works at any given time, with several PMOs up and running around the world. What role each one plays “varies for us depending on the maturity and the strength of the project management team,” Mr. Hall says. “In some cases those project managers are in the PMO doing program and project management along with the support folks. But in other cases it's really just a support-type organization.”

Hire the right people. “One of the questions that goes through my mind is how much of a believer in the role of a PMO is the [PMO leader],” Mr. Hall says. He adds that it takes a rare person with a rare set of experiences to make a PMO work. That often-elusive list includes a combination of having been on the ground and led several projects successfully as well as a sound understanding of the business and why a PMO and project managers are valuable.

“I have always said that people who lead PMOs are either sane or successful. But rarely both,” Mr. Hall says. “I almost want to say there's a hint of being subservient, but it's not that. You're not there to serve, but you're definitely there to support. And what you do must be seen as being done for [the project community] and for the organization—not for the sake of the process.”

Start small. “Get your feet wet,” Mr. Johnson says. “Everyone wants to change the world, but it doesn't happen overnight.”

BCC made the decision to launch a PMO in late 2005, but the consulting and outsourcing company knew it had to go slow.

“We wanted to take an evolutionary approach, adding processes, procedures and tools gradually instead of making a big bang,” says Michal Kunze, PMP, a PMO manager at BCC, Suchy Las, Poland.

At launch, the PMO was made up of only two members. Today it's up to 13, with three project coordinators, one PMO manager and nine project managers—and it isn't stopping there. The company is gradually adding tools and processes,” Mr. Kunze says. “The role of PMO is growing. More and more processes are managed by the PMO.”

IF AT FIRST YOU DON'T SUCCEED …

Ms. Lora learned several of these lessons while launching a PMO at a dot-com later acquired by SunGuard. “We bought a very large enterprise software application and thought that would provide us with much of the solution,” she says. “We got very excited by what we were trying to do and we tried to do too much too quickly.”

38

The median number of projects that organizations with a PMO work on per year

18

The median number of projects that organizations without a PMO work on per year

SOURCE: THE STATE OF THE PMO 2007-2008

Companies can't just bring a group of people together and tell them they now report to the PMO. “There are other changes that have to happen within the organization oftentimes to support project management and a PMO,” she says.

That may include pressing on the finance department to help in the creation of a realistic budget or asking human resources to assist in establishing job descriptions for new positions.

To address the PMO's issues, Ms. Lora and her team went back to basics. Companies need to look at whether they have clearly defined the model for their PMO and whether it's appropriate for their organization, she says.

And sometimes those answers might reveal a painful reality.

“It's better to say ‘OK, this wasn't quite the right model. Let's go ahead and change it,' than just drop it altogether,’” Ms. Lora says. “Because you've probably made quite a bit of progress, you just need to refine what you've done.” PM

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK MAY 2008 WWW.PMI.ORG
MAY 2008 PM NETWORK

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